Sales spark at Danone despite headwinds

(Sharecast News) - French food giant Danone posted higher quarterly sales on Wednesday, as it shrugged off the impact of war in the Middle East and a baby formula recall. The owner of Activia, Evian and Aptamil, among many others, saw sales fall 2% to €6.84bn in the first three months of the year, but rise 2.7% on a like-for-like basis. Consensus had been for underlying growth of 2.6%.

Growth was led by volume/mix growth of 1.5% and overall price increases of around 1.2%.

Danone said trading had been "resilient" in Europe and the Middle East and Africa, despite the impact of war in Iran and the European formula recall. It emerged earlier this year that batches of infant milk formula made by Danone and Nestle had been contaminated with the toxin cereulide.

It also reiterated its full-year guidance, for like-for-like sales growth of between 3% and 5% and recurring operating income growth faster than sales.

As at 1100 BST, the Paris-listed stock was trading up 3%.

Antoine de Saint-Affrique, chief executive, said: "This first quarter demonstrated again the resilience, strength and relevance of our health-focused portfolio: against a challenging backdrop, we delivered a solid performance.

"In a world that remains volatile and uncertain, we stay disciplined and fully focused on executing on our Renew strategy. We are confident in our science-based, and consumer and patient-centric approach, and confirm our full-year guidance."